The Works Made for Hire Doctrine and the Employee/Independent Contractor Dichotomy: The Need for Congressional Clarification

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1 Hastings Communications and Entertainment Law Journal Volume 10 Number 2 Article The Works Made for Hire Doctrine and the Employee/Independent Contractor Dichotomy: The Need for Congressional Clarification Bennett J. Fidlow Follow this and additional works at: hastings_comm_ent_law_journal Part of the Communications Law Commons, Entertainment, Arts, and Sports Law Commons, and the Intellectual Property Law Commons Recommended Citation Bennett J. Fidlow, The Works Made for Hire Doctrine and the Employee/Independent Contractor Dichotomy: The Need for Congressional Clarification, 10 Hastings Comm. & Ent.L.J. 591 (1987). Available at: This Note is brought to you for free and open access by the Law Journals at UC Hastings Scholarship Repository. It has been accepted for inclusion in Hastings Communications and Entertainment Law Journal by an authorized editor of UC Hastings Scholarship Repository.

2 The "Works Made for Hire" Doctrine and the Employee/Independent Contractor Dichotomy: The Need for Congressional Clarification by BENNETT J. FIDLOW* Introduction Perhaps the most basic element of copyright law is the concept that an author is entitled to protection for his work. This right is wholly a creation of federal statute and is given substance by Article.) I, section 8 of the United States Constitution, which vests in Congress the power "[t]o promote the progress of science and useful arts, by securing for limited times to authors... the exclusive right to their... writings... - Pursuant to this power, Congress enacted the first Copyright Act in The nearly two intervening centuries have witnessed several revisions in copyright law, 3 which are now codified in the Copyright Act of 1976 (1976 Act). 4 Unfortunately, application of copyright law has always been complicated by a basic definitional uncertainty. Section 201 of the 1976 Act recognizes that copyright ownership vests in the * B.F.A., Carnegie-Mellon University, 1983; M.F.A., Columbia University (thesis pending); Member, Third Year Class. An earlier version of this note received the first place award in the 1987 Nathan Burkan Memorial Copyright Competition at Hastings College of the Law sponsored by the American Society of Composers, Authors and Publishers (ASCAP). 1. U.S. CONST. art. I, 8, cl Act of May 31, 1790, ch. 15, 1 Stat. 124 (current version at 17 U.S.C (1982 & Supp. III 1985). 3. There have been four major revisions of the Copyright Act: Act of Feb. 3, 1831, ch. 16, 4 Stat. 436; Act of July 8, 1870, ch. 320, 16 Stat. 198; Act of March 4, 1909, Pub. L. No , ch. 320, 35 Stat [hereinafter 1909 Act]; Act of Oct. 19, 1976, Pub. L. No , 90 Stat [hereinafter 1976 Act or 17 U.S.C.]; see H.R. REP. No. 1476, 94th Cong., 2d Sess. (1976), reprinted in 1976 U.S. CODE CONG. & ADMIN. NEWS (90 Stat.) 5659 (history of the 1976 revision) [hereinafter Legislative History]. See also S. REP. No. 473, 94th Cong., 1st Sess. (1975) (which is substantially identical to the House Report) U.S.C (1982 & Supp. III 1985) as amended by Act of Nov. 8, 1984, Pub. L. No , 98 Stat

3 HASTINGS COMM/ENT L. J. [Vol. 10:591 author of a work, 5 but nowhere in the Act, or in past Acts, is there a definition of "author." 6 On its face, this does not seem to be a serious problem since the meaning appears obvious: the author should be the person who creates the work. 7 However, the Copyright Act itself precludes such a simplistic construction since, in some instances, it requires that copyright protection be given to a person other than the creator.' The confusion resulting from this apparently paradoxical situation has generated a body of law known as the "works made for hire" doctrine, which attempts to deal with the problem of determining copyright ownership of a work created by one party at the behest of another party. 9 The doctrine is described in the 1976 Act by section 201(b), which reads: In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of [ownership of copyright], and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright. 1 " Although the omission of a statutory definition of "author" may seem relatively harmless, it opens the door for ambiguity and interpretation. When coupled with the uncertainty in applying the "works made for hire" doctrine, 11 due to its own lack of definitional clarity, the resulting confusion has generated volumes of writings, reports, studies, committee prints, hearing 5. The pertinent part of 201 reads "[c]opyright in a work protected under this title vests initially in the author or authors of the work." 17 U.S.C. 201(a) (1982). 6. Section 101 of the 1976 Act, headed "Definitions," does not list the term "author." See 17 U.S.C Section 26 of the 1909 Act, headed "Terms Defined," only mentions "author" to say that the word "shall include an employer in the case of a work made for hire." See 1909 Act 26. This same use of the word "author" is included in the 1976 Act in 201(b), but no additional definition is offered. 17 U.S.C. 201(b). 7. In 1884, the U.S. Supreme Court looked at the problem created by the lack of a statutory definition for the term "author" and quoted with approval the definition "he to whom anything owes its origin; origination; maker. Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 58 (1884). 8.' In certain situations, the 1976 Act requires that the employer of the creator be considered the author and therefore be granted ownership rights in the work. See, e.g., 17 U.S.C. 201(b), 304(a) (1982). 9. This is not to be confused with the situation in which one party works with another party in creating the work. This would result in a "joint work." See id , 201(a), 302(b). 10. Id. 201(b). 11. See infra notes and accompanying text.

4 1988] "WORKS MADE FOR HIRE" DOCTRINE notes, and bill proposals, 12 as well as a large body of case law. 13 All of these works,.academic, legislative and judicial, have attempted to set guidelines for establishing copyright ownership in light of these definitional omissions; none, however, have been entirely successful. The confusion that still exists is the focus of this note. The 1976 Act bases several important ownership issues on whether or not a work is classified as "made for hire." They are: 1. initial ownership protection; 4 2. copyright duration; 5 3. renewal rights;' 6 and 4. termination rights Initial Ownership Protection. As previously mentioned, ownership protection is granted to authors in section 201(a),'" however, the author of a "work made for hire" is the employer, not the creator of the work.' 9 2. Copyright Duration. As stated in the U.S. Constitution, copyright protection is granted for only a limited time. 20 In a work created on or after January 1, 1978 (the date on which the 12. See generally 1 M. NIMMER, NIMMER ON COPYRIGHT 5.03, at 5-10 to 5-31 (1986); Note, The Works Made for Hire Doctrine of the 1976 Copyright Act After Aldon Accessories v. Spiegel, Inc., 5 CARDOZO ARTS & ENT. L.J. 265 (1986); Deutsch, Works for Hire, and Other Ownership Questions, in CURRENT DEVELOPMENTS IN COPYRIGHT LAW 437 (1986); O'Meara, 'Works Made for Hire' Under the Copyright Act of Two Interpretations, 15 CREIGHTON L. REV. 523 (1982); Angel & Tannenbaum, Works Made for Hire Under S. 22, 22 N.Y.L. SCH. L. REV. 209 (1976), reprinted in NEW YORK LAW SCHOOL LAW REVIEW, THE COMPLETE GUIDE TO THE NEW COPY- RIGHT LAW 29 (1977); STAFF OF SENATE COMM. ON THE JUDICIARY, 86TH CONG., 2D SESS., STUDY No. 13, WORKS MADE FOR HIRE AND ON COMMISSION 142 (Comm. Print 1960) [hereinafter STUDY No. 13], reprinted in 1 STUDIES ON COPYRIGHT 717 (A. Fisher mem. ed. 1963); STAFF OF SENATE COMM. ON THE JUDICIARY, 86TH CONG., 2D SESS., 537 (Comm. print 1960) [hereinafter STUDY No. 31] reprinted in 1 STUDIES ON COPYRIGHT 533 (A. Fisher mem. ed. 1963). As a source of specific legislative history, see 3 THE KAMINSTEIN LEGISLATIVE HISTORY PROJECT: A COMPENDIUM AND ANALYTI- CAL INDEX OF MATERIALS LEADING TO THE COPYRIGHT ACT OF (A. Latman & J. Lightstone ed. 1983) [hereinafter KAMINSTEIN] and Legislative History, supra note For a history of the case law development of the doctrine, see Easter Seal Soc'y v. Playboy Enters., 815 F.2d 323, (5th Cir.), reh'g denied, 820 F.2d 1223 (5th Cir.), petition for cert. filed, 56 U.S.L.W (1987) (inviting Solicitor General's brief expressing view of the United States) U.S.C. 201(b) (1982). 15. Id. 302(c). 16. Id. 304(a). 17. Id. 203(a). 18. See supra note 5 and accompanying text U.S.C. 201(b). 20. See supra note 1 and accompanying text.

5 HASTINGS COMM/ENT L. J. [Vol. 10: Act took effect), copyright protection remains in force for a period equal to the life of the author plus fifty years. 21 If this same work has been classified as "made for hire," however, the protection lasts "for a term of seventy-five years from the year of its first publication, or a term of one hundred years from the year of its creation, whichever expires first." Renewal Rights. If the work was created before January 1, 1978, the copyright must be renewed in order to extend the protection to approximate the new duration dates set by the 1976 Act. 23 In most instances, the author is entitled to a renewal and extension. In a "work made for hire" situation, however, the employer is considered the author; it is therefore the employer, not the creator, who is entitled to these rights Termination Rights. When the rights to a work are transferred or licensed to another party, the copyright statute provides that the author may terminate the grant or license after thirty-five years. 25 If a work is classified as "made for hire," however, it is not subject to termination. 26 Section 101 of the 1976 Act 27 defines a "work made for hire" as: (1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, [28 ] as a part of a motion picture 29] or other audiovisual work, 30 1 as a translation, as a U.S.C. 302(a). 22. Id. 302(c). 23. See id. 304(a). 24. Id. For further discussion of copyright renewals in "works made for hire," see Angel & Tannenbaum, supra note 12, at ; STUDY No. 31, supra note U.S.C. 203(a). 26. Id. 27. Id Section 101 defines a "collective work" as "a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole." Id. 29. Section 101 defines "motion pictures" as "audiovisual works consisting of a series of related images which, when shown in succession, impart an impression of motion, together with accompanying sounds, if any." Id. 30. Section 101 defines "audiovisual works" as: works that consist of a series of related images which are intrinsically intended to be shown by the use of machines or devices such as projectors, viewers, or electronic equipment, together with accompanying sounds, if any,

6 1988] "WORKS MADE FOR HIRE" DOCTRINE supplementary work, 3 11 as a compilation, [321 as an instructional text, [331 as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. [34 1 Subsection (1) of the above definition, concerning employee works, has long been recognized and respected as viable; 35 subsection (2), dealing with commissioned works, however, has engendered critical and interpretive conflict throughout its history. 6 This subsection can have devastating results for an independent contractor who is "specially ordered or commissioned" to create a work since, if the work is classified as "made for hire," he is forced to give up all of the copyright protections. The specific problem addressed by this analysis centers around the fact that the wording of the "work made for hire" definition was substantially revised in the 1976 Act. 37 Some argue that this was done to allow added protection to the independent contractor by removing the old presumption that Id. regardless of the nature of the material objects, such as films or tapes, in which the works are embodied. 31. Section 101 defines a "supplementary work" as: a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes... Id. 32. Section 101 defines a "compilation" as "a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. The term 'compilation' includes collective works." Id. 33. Section 101 defines an "instructional text" as "a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities." Id. See also Legislative History, supra note 3, at U.S.C See, e.g., Aldon Accessories Ltd. v. Spiegel, Inc., 738 F.2d 548 (2d Cir.), cert. denied, 469 U.S. 982 (1984); Scherr v. Universal Match Corp., 417 F.2d 497 (2d Cir. 1969), cert. denied, 397 U.S. 936 (1970); Bleistein v. Donaldson Lithographing Co., 188 U.S. 239 (1903). See also Legislative History, supra note 3, at See, e.g., Easter Seal Soc'y v. Playboy Enters., 815 F.2d 323 (5th Cir.), reh'g denied 820 F.2d 1223 (5th Cir.), petition for cert. filed, 56 U.S.L.W (1987) (inviting Solicitor General's brief expressing view of the United States); Dielman v. White, 102 F. 892 (C.C.D. Mass. 1900). 37. See Legislative History, supra note 3, at 121.

7 HASTINGS COMM/ENT L. J. [Vol. 10:591 copyright automatically vested in the commissioning party. 3 Others disagree, saying that the revision was meant to be a clarification and not a drastic change in the methods of determining copyright ownership. 39 Recently, a conflict among several of the federal circuit courts has reflected these opposing views. 4 The Second Circuit, in 1984, ruled in favor of the latter, more conservative view in Aldon Accessories Ltd. v. Spiegel, Inc. 41 and was followed in 1986 by the Seventh Circuit in Evans Newton, Inc. v. Chicago Systems Software. 42 Most recently, in April 1987, the Fifth Circuit announced its decision in Easter Seal Society v. Playboy Enterprises, 43 which strongly opposes the Aldon view. 44 Although this case seems to be fairly isolated, its reasoning is persuasive and is the foundation of the viewpoint adopted by this note. The United States Supreme Court has also shown some interest in the Easter Seal Society case. On November 9, 1987, the Court invited the Solicitor General to file a brief expressing the position of the United States; 45 accordingly, the Court may soon attempt to judicially clarify the current ambiguity in the copyright statute by resolving the opposing circuit opinions. Section I of this note discusses the history of the "works made for hire" doctrine and the problems associated with it up through the 1976 statutory revision. Section II reviews the current variations in statutory interpretation and the opposing circuit court rulings. Section III looks at the attempts since 1976 at correcting the "works made for hire" confusion through fur- 38. See 1. M. NIMMER, supra note 12, 5.03, at 5-10; N. BOORSTYN, COPYRIGHT LAW, 3.3, at 85 (1981 & Supp. 1986); Angel & Tannenbaum, supra note 12, at 209, See O'Meara, supra note 12, at 525. O'Meara termed this view "conservative." Id. at 527. See also Aldon, 738 F.2d at The opposing view, supported by Melville Nimmer, was termed by O'Meara as the "radical" view since it called for a radical departure from the pre-1976 Act interpretation. See O'Meara, supra note 12, at See, e.g., Easter Seal Soc'y, 815 F.2d at 323; Aldon, 738 F.2d at 548; Evans Newton, Inc. v. Chicago Sys. Software, 793 F.2d 889 (7th Cir.), cert. denied, 107 S. Ct. 434 (1986). 41. The court in Aldon upheld the trial judge's jury instruction, which stated in part, "It does not matter whether the for-hire creator is an employee in the sense of having a regular job with the hiring author. What matters is whether the hiring author caused the work to be made and exercised the right to direct and supervise the creation." Aldon, 738 F.2d at Evans Newton, 793 F.2d at 894 n Easter Seal Soc'y, 815 F.2d at See infra notes and accompanying text. 45. Easter Seal Soc'y, petition for cert. filed, 56 U.S.L.W (1987).

8 1988] "WORKS MADE FOR HIRE" DOCTRINE ther statutory revision. This note concludes that although the U.S. Supreme Court may unify the current application of the doctrine, the best solution is for Congress to amend the Copyright Act to include workable definitions which would more clearly differentiate between an employee working "within the scope of his or her employment" and an independent contractor creating "a work specially ordered or commissioned." A. The 1909 Act and the Courts I History of the Doctrine Although Congress enacted the first copyright law in 1790,46 the basic concepts embodied in the "works made for hire" doctrine were not officially recognized until the early 1900's. In 1903 the Supreme Court, in Bleistein v. Donaldson Lithographing Co., 47 stated that an employer owned the copyright to advertisements which had been created by an employee in the course of his employment. 48 Although ownership of the copyright by the employer was not the major issue in the case, later cases and commentators point to Bleistein as the origin of the "works made for hire" doctrine. 9 The rule that employers owned the copyright in works created by their employees was first codified six years after Bleistein in the Copyright Act of 1909 (1909 Act). 5 " The statute accomplished this by providing that "the word 'author' shall in- 46. See supra note 2 and accompanying text U.S. 239 (1903). 48. Id. at 248. In the opinion, written by Justice Holmes, the Court stated, "There was evidence warranting the inference that the designs belonged to the plaintiffs, they having been produced by persons employed and paid by the plaintiffs in their establishment to make those very things." Id. 49. See, e.g., Simon, Faculty Writings: Are They 'Works Made for Hire' Under the 1976 Copyright Act?, 9 J. C. & U. L. 485, 487 ( ); After Aldon, supra note 12, at 268; Real Estate Data, Inc. v. Sidwell Co., 809 F.2d 366, 371 (7th Cir. 1987); Murray v. Gelderman, 566 F.2d 1307, 1309 (5th Cir. 1978); Scherr v. Universal Match Corp., 417 F.2d 497, 500 (2d Cir. 1969), cert. denied, 397 U.S. 936 (1970); Brattleboro Publishing Co. v. Winmill Publishing Corp., 369 F.2d 565, 567 (2d Cir. 1966); Tobani v. Carl Fischer, Inc., 98 F.2d 57, 59 (2d Cir.), cert. denied, 305 U.S. 650 (1938); Brown v. Molle Co., 20 F. Supp. 135, 136 (S.D.N.Y. 1937). 50. See supra note 3. For an analysis of the applications of the "works made for hire" doctrine under the 1909 Act see Annotation, Application of "Works for Hire" Doctrine Under Federal Copyright Act (17 US.C. 1 et seq.), 11 A.L.R. FED. 457 (1972).

9 HASTINGS COMM/ENT L. J. [Vol. 10:591 clude an employer in the case of works made for hire," '51 thereby giving employers all of the copyright ownership rights usually reserved for the creator of a work. The only other section of the 1909 Act dealing with the employer-employee relationship was the provision for copyright renewal. 5 2 By specifically setting off "works made for hire" as a separate category of copyrightable material, Congress made it crucial, in determining both ownership and renewal rights, to define the original relationship between the creator and anyone with whom he may have worked in commercially exploiting his creation. Unfortunately, the 1909 Act did not define "employee" or "works made for hire," 5 3 and the legislative history of the Act offers little guidance in this area. 54 The courts, therefore, had to determine the factual relationship between the parties in each case, thereby judicially defining the limits of the "works made for hire" doctrine on a case-by-case basis. When deciding "works made for hire" cases, courts followed the principle set out in Bleistein, which held that proof indicating that employers owned the copyright in works created by their employees 5 5 was a rebuttable presumption rather than a conclusive one. 56 It was also established that the employer need not actually participate in the creation process to obtain copyright ownership. This was expressed in a leading case involving renewal rights in works made "for hire," Shapiro, Bernstein & Co. v. Bryan. 57 In Shapiro, Judge Learned Hand Act Id. 24. Normally renewal rights remained with the creator of the work even if he had previously contracted away his rights. The pertinent part of section 24 reads, "[Iln the case of any.., copyrighted works... the author of such work... shall be entitled to a renewal and extension of the copyright.. " Id. In the case of a work considered "made for hire," however, the employer was entitled to the renewal. The part of section 24 which referred to "works made for hire" reads, "[I]n the case of any... work upon which the copyright was originally secured...by an employer for whom such work [was] made for hire, the proprietor of such copyright shall be entitled to a renewal and extension..." Id. For further discussion of the renewal provisions, see generally supra notes and accompanying text. 53. See 1909 Act 26. See also STUDY No. 13, supra note 12, at 128; OMeara, supra note 12, at 524; Easter Seal Soc'y, 815 F.2d at See, e.g., STUDY No. 13, supra note 12, at See supra notes and accompanying text. 56. See, e.g., Easter Seal Soc'y, 815 F.2d at ; Picture Music, Inc. v. Bourne, Inc., 457 F.2d 1213, 1216 (2d Cir.), cert. denied, 409 U.S. 997 (1972); Brattleboro Publishing Co. v. Winmill Publishing Corp., 369 F.2d 565, 567 (2d Cir. 1966) F.2d 697 (2d Cir. 1941).

10 19881 "WORKS MADE FOR HIRE" DOCTRINE considered the scope of the "works made for hire" doctrine, finding: [Although the employees] argue that that phrase [works made for hire] does not include works of which employees are the real authors, but only those to which they make some ancillary contribution to the "employer" who is the chief author,... [t]he words [of the 1909 statute] suggest no such distinction... 8 As the case law developed, the courts established a set of standards to use when testing for the employment relationship. The most important standard that developed was the right of the employer to exercise supervision and control over the work. This was described as the "hallmark" of the "employment for hire" relationship. 59 As the Second Circuit - the de facto copyright court in the United States" - explained in Scherr v. Universal Match Corp. :61 The essential factor in determining whether an employee created his work of art within the scope of his employment.., is whether the employer possessed the right to direct and to supervise the manner in which the work was being performed 621 Other pertinent, but non-essential, considerations, are those indicating at whose insistence, expense, time and facilities the work was created. [63 Additionally, the nature and amount of compensation [if any] received by the employee... may be considered; [64 but... it is of minor relevance. [ Id. at 700. See also Easter Seal Soc'y, 815 F.2d at 326 n.7 (citing Picture Music as saying that it is the theoretical right to direct and supervise an employee's work which makes it "for hire"). 59. Epoch Producing Corp. v. Killiam Shows, 522 F.2d 737, 744 (2d Cir. 1975), cert. denied, 424 U.S. 955 (1976); see generally 1 M. NIMMER, supra note 12, 5.03[B] at 5-21 n.18; N. BOORSTYN, supra note 38, at See Easter Seal Soc'y, 815 F.2d at 325 (describing the Second Circuit's wellknown reputation for copyright decisions) F.2d 497, 500 (2d Cir. 1969), cert. denied, 397 U.S. 936 (1970). 62. Id. at 500; Picture Music, 457 F.2d at 1216; see generally 11 A.L.R. FED. 457, supra note 50, 5(a). 63. See, e.g., Scherr, 417 F.2d at 500; Brattleboro, 369 F.2d at 568; Picture Music, 457 F.2d at 1216; Lin-Brook Builders Hardware v. Gertler, 352 F.2d 298, 300 (9th Cir. 1965); see generally 11 A.L.R. FED. 457, supra note 50, 5(b). 64. See, e.g., Tobani v. Carl Fischer, Inc., 98 F.2d 57, (2d Cir.), cert. denied, 305 U.S. 650 (1938); Scherr, 417 F.2d at 500; Donaldson Publishing Co. v. Bregman, Vocco & Conn, Inc., 375 F.2d 639 (2d Cir. 1967), cert. denied, 389 U.S (1968); Picture Music, 457 F.2d at 1216; see generally 11 A.L.R. FED. 457, supra note 50 5(c). 65. See Scherr, 417 F.2d at (citing M. NIMMER, COPYRIGHT 62.2 (1968)).

11 HASTINGS COMM/ENT L. J. [Vol. 10:591 B. The Independent Contractor Problem The effect of the "works made for hire" doctrine regarding employees was unclear, with respect to the status of a work created by an independent contractor. The independent contractor relationship is similar, but not identical, to the settled employer-employee relationship. A contractor is under some obligation to the commissioning party, but not as a full employee. Usually, the contractor works under different conditions and on a less formal basis than an employee. In return, the commissioning party avoids the obligation of providing benefits to the contractor which are normally provided for employees, such as a regular salary and insurance coverage. 66 The 1909 Act and its legislative history do not mention independent contractors. 67 As early as 1900, the courts had articulated the rule that commissioned art works were presumed to belong totally to the hiring party: 68 In general when an artist is commissioned to execute a work of art not in existence at the time the commission is given, the burden of proving that he retains a copyright in the work of art executed, sold, and delivered under the commission rests heavily upon the artist himself. If a patron gives a commission to an artist, there appears.., a very strong implication that the work of art commissioned is to belong unreservedly and without limitation to the patron. 69 The early cases presumed that the copyrights were assigned to the patron and did not rely on a "made for hire" theory; 7 how- 66. The types of employment benefits mandated by law vary from state to state. In many states, employers are required to pay for workers' compensation programs, unemployment insurance, social security taxes, and retirement plans. In California, for example, see CAL. LABOR CODE 227 (West Supp. 1987) (pension fund payments), and 3600 (workers' compensation), as well as CAL. UNEMP. INS. CODE (West Supp. 1987) (unemployment insurance). 67. See 1909 Act 26. See also STUDY No. 13, supra note 12, at 128; OMeara, supra note 12, at 524; Easter Seal Soc'y, 815 F.2d at Dielman v. White, 102 F. 892 (C.C.D. Mass. 1900). 69. Id. at See, e.g., id. at 892; Yardley v. Houghton Mifflin Co., 108 F.2d 28 (2d Cir. 1939), cert. denied, 309 U.S. 686 (1940); Lumiere v. Robertson-Cole Distrib. Corp., 280 F. 550 (2d Cir.), cert. denied, 259 U.S. 583 (1922). This is best seen in Yardley. where the court ruled that "if an [artist] is solicited by a patron to execute a commission for pay, the presumption should be indulged that the patron desires to control the publication of copies and that the artist consents...." Id. at 31 (emphasis added). The distinction between ownership by "consent" (resulting in an assignment) and initial ownership by operation of statute (resulting in a classification as a "work made for hire") should not be overlooked. See Easter Seal Soc'y, 815 F.2d at 326.

12 1988] "WORKS MADE FOR HIRE" DOCTRINE ever, later courts often confused the distinction and treated works made by contractors as the equivalent of works made by employees in the course of their employment. Both were considered "works made for hire. '7 1 It was not until 1966 that a court expressly used the "works made for hire" doctrine to decide an independent contractor case. In Brattleboro Publishing Co. v. Winmill Publishing Corp., 72 the Second Circuit created a new expanded definition of the "works made for hire" doctrine by summarizing the existing employer-employee copyright ownership presumption and then stating that it saw "no sound reason why these same principles are not applicable when the parties bear the relationship of employer and independent contractor. 7 3 With this new interpretation, the "works made for hire" doctrine stood for the presumption that copyright ownership automatically vested in the employer or the hiring party because of his right to control the work, although no actual control had to be asserted. 4 Although the Brattleboro court might have expected its judicial extension of the "works made for hire" presumption to solve the copyright ownership questions in the independent contractor area, it did not. 7 5 The independent contractor anomaly was considered in the revision of the copyright statute. C. The Legislative History Suggestions for the revision of copyright law in the "works made for hire" area date back to the early 1900's. 77 However, it was not until the mid-1950's that efforts were successful in re- 71. See, e.g., Picture Music, 457 F.2d at ; Brattleboro, 369 F.2d at For example, the court in Picture Music refused to consider the differences between employees and contractors, saying that "the purpose of the [1909] statute is not to be frustrated by conceptualistic formulations of the employment relationship... That [the creator] acted in the capacity of an independent contractor does not preclude a finding that the [work] was done for hire." Picture Music, 457 F.2d at F.2d 565 (2d Cir. 1966). 73. Id. at 568 (citing Yardley); but see id. at 569 (Lombard, C.J. concurring). 74. See Picture Music, 457 F.2d at 1216 (citing Brattleboro and Yardley). See also Easter Seal Soc'y, 815 F.2d at See, e.g., Scherr, 417 F.2d at 502 (Friendly, J., dissenting). See also Easter Seal Soc'y, 815 F.2d at 323; Aldon Accessories Ltd. v. Spiegel, Inc., 738 F.2d 548 (2d Cir.), cert. denied, 469 U.S. 982 (1984). 76. Evidence of the independent contractor anomaly consideration is apparent in the various studies on the legislative history of the 1976 Copyright Act, supra note 12 (discussed below). 77. See STUDY No. 13, supra note 12, at 128 n.4. See also infra notes and accompanying text.

13 HASTINGS COMM/ENT L. J. [Vol. 10:591 vising the statute, sweeping aside the common law through which the courts had interpreted the "works made for hire" doctrine. As a result of the United States becoming a party to the Universal Copyright Convention, interest grew in revising the U.S. Copyright Law. Through the Legislative Appropriations Act of 1955, Congress ordered a series of thirty-five studies on most of the substantive issues for copyright revision. 7 " The 1958 report, known as Study No. 13 and entitled Works Made For Hire and on Commission, 79 was one of the first reports to consider separate treatment of independent contractors. 8 " The report was a comprehensive study of the legislative history and court decisions as well as a commentary on relevant foreign law. The study showed that there had been many attempts to change the treatment of works made for hire and on commission after the passage of the 1909 Act. 81 It examined the numerous bills which had been proposed to Congress over the years, 2 all of which contained variations and explanations which were similar to the sections eventually enacted in The study also analyzed the basic issues underlying the pressure for revision and suggested some solutions. 8 One of the suggestions centered around the analogous use of the "shop right" doctrine in patent law. 8 4 The study described this doc- 78. See generally Hearings on H.R Before the Subcomm. on Appropriations of the United States Senate Making Appropriations for the Legislative Branch and the Judiciary Branch for the Fiscal Year ending June 30, 1955, 83rd Cong., 2d Sess. (1955). See also O'Meara, supra note 12, at STUDY No. 13, supra note Id. at Id. at H.R. 8177, 68th Cong., 1st Sess. (1924) (the Dallinger Bill), modified in H.R. 9137, 68th Cong., 1st Sess. (1924) (considered briefly ifi Hearings on H.R and H.R Before The House Comm. on Patents, 68th Cong., 1st Sess. (1924)); H.R , 68th Cong., 2d Sess. (1925) (the Perkins Bill) (considered in Hearings on H.R Before the House Comm. on Patents, 68th Cong., 2d Sess. (1925)); H.R , 69th Cong., 1st Sess. (1926) (the Vestal Bill), modified in H.R , 71st Cong., 2d Sess. (1930) (passed by the House, but rejected in Hearings on H.R Before the Senate Comm. on Patents, 71st Cong., 2d Sess. (1931)); H.R , 72d Cong., 1st Sess. (1932) (the Sirovich Bill) (considered in Hearings on the General Revision of the Copyright Law Before the House Comm. on Patents, 72d Cong., 1st Sess. (1932)); S. 2465, 74th Cong., 1st Sess. (1935) (the Duffy Bill); H.R , 74th Cong., 2d Sess. (1936) (the Daly Bill). (The Duffy, Daly, and Sirovich bills were considered in lengthy hearings in Hearings on Revision of the Copyright Laws Before the House Comm. on Patents, 74th Cong., 2d Sess. (1936); S. 3043, 76th Cong., 3d Sess. (1940) (the Thomas Bill)). 83. STUDY No. 13, supra note 12, at See id. at 140; see also infra notes 104, and accompanying text.

14 1988] "WORKS MADE FOR HIRE" DOCTRINE trine as being "in the nature of an implied nonexclusive license [given to the employer] to utilize the patent [owned by the employee] throughout the term of protection. '8 5 Prior to its publication, copies of the study were sent to several copyright authorities of the day, asking for their responses and suggestions. Most of the responses stated that no change in the law concerning "works made for hire" was warranted, and specifically that no distinction should be made concerning commissioned works. 8 6 The second major work concerning the revision was a report submitted in 1961 by Abraham L. Kaminstein, who was then Register of Copyrights. 8 ' His report recommended that no change be made to the general "works made for hire" rules, arguing that "[i]n the case of a work made for hire (defined as a work created for an employer by an employee within the regular scope of his employment), the employer should have the right to secure copyright." 8 Kaminstein did, however, advocate change regarding commissioned works, since he went on to recommend that "[i]n the case of any other commissioned work [excluding portraits], the author [should] have that right unless expressly assigned. ' STUDY No. 13, supra note 12, at 140. The Supreme Court defined the limits of the "shop right" doctrine in United States v. Dubilier Condenser Corp., 289 U.S. 178 (1960), saying, "Where [an employee] [(1)] during his hours of employment, [(2)] working with his [employer's] materials and appliances, [(3)] conceives and [(4)] perfects an invention for which he obtains a patent, he must accord his [employer] a nonexclusive right to practice the invention." Id. at 188. For further discussion of the "shop right" doctrine, see 35 U.S.C.S. 261, nn (Law. Co-op 1981 & Supp. 1987); THE ENCYCLOPEDIA OF PATENT PRACTICE AND INVENTION MANAGEMENT (1964). See also Angel & Tannenbaum, supra note 12, at 32 n.11 (citing Discussion and Comments on the Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law, 88th Cong., 1st Sess. pt. 2, 154 (1963) [hereinafter 1963 Discussion]; Annotation, Application and Effect of "Shop Right Rule" or Licen~e Giving Employer Limited Rights in Employees'Innovations and Discoveries, 61 A.L.R.2d 356 (1958); Note, supra note 12, at 285; STUDY No. 13, supra note 12, at See STUDY No. 13, supra note 12, at (subsection entitled Comments and Views Submitted to the Copyright Office on Works Made for Hire and on Commission). One of the few early advocates of change was Professor Melville Nimmer, who, until his recent death, was regarded as the leading authority on copyright law in the United States. See id. at COPYRIGHT LAW REVISION, REPORT OF THE REGISTER OF COPYRIGHTS ON THE GENERAL REVISION OF THE UNITED STATES COPYRIGHT LAW, 87th Cong., 1st Sess. (1961) [hereinafter 1961 REPORT]; see also KAMINSTEIN, supra note 12, at 335; Deutsch, supra note 12, at See 1961 REPORT, supra note 87. See also KAMINSTEIN, supra note 12, at 335; Deutsch, supra note 12, at See supra note 88.

15 HASTINGS COMM/ENT L. J. [Vol. 10:591 Between 1961 and 1964, there were numerous panel discussions sponsored by the Copyright Office in which representatives from a wide range of industries affected by the revisions participated. 9 Representatives of authors, screenwriters, and composers advocated greater rights for those creating the works, while representatives of publishers and the motion picture industry generally advocated restraint in changing the "works made for hire" doctrine. 91 In 1965, a revised bill, 92 which for the first time conditioned the "work made for hire" status of a commissioned work on the type or category of work being considered, was submitted to Congress. 93 The bill attempted to change the "works made for hire" definition to include "a work specially ordered or commissioned to be used as a contribution to a collective work, as part of a motion picture, as a translation, or as a supplementary work, if the parties expressly agree in writing that the work shall be considered a work made for hire." 94 The Register's Supplementary Report, which commented on the bill, states that the "works made for hire" definition is a "carefully worked out compromise aimed at balancing legitimate interests on both sides." 95 It also noted that the additional requirement of a writing, which is included in the 1976 Act, 96 was considered but discarded as useless because authors could easily be forced into signing away their rights. 97 Extensive hearings on the bill were held in both Houses, but the 89th Congress adjourned before further action could be taken See Legislative History, supra note 3, at See KAMINSTEIN, supra note 12; Angel & Tannenbaum, supra note 12, at 31 n.10 (citing Hearings on H.R. 4347, H.R. 5680, H.R and H.R. 6835, Before Subcomm. No. 3 of the House Comm. on the Judiciary, 89th Cong., 1st Sess., pt. 1 (1966) [hereinafter Hearings]). See also O'Meara, supra note 12, at 526; Note, supra note 12, at H.R. 4347, 89th Cong., 1st Sess. (1965); see also KAMINSTEIN, supra note 12, at 355; Deutsch, supra note 12, at H.R. 4347, 89th Cong., 1st Sess. (1965); see also KAMINSTEIN, supra note 12, at 355; Deutsch, supra note 12, at See supra note See Deutsch, supra note 12, at 443, (citing COPYRIGHT LAW REVISION PART VI SUPPLEMENTARY REPORT OF THE REGISTER OF COPYRIGHTS ON THE GENERAL REVISION OF THE U.S. COPYRIGHT LAW: 1965 REVISION BILL 66 (1965) [hereinafter REGISTER'S SUPPLEMENTARY REPORT]) U.S.C. 101 (1982 & Supp. III 1985). 97. REGISTER'S SUPPLEMENTARY REPORT, supra note 95, at 67; see also Deutsch, supra note 12, at 'See Legislative History, supra note 3, at 48.

16 1988] "WORKS MADE FOR HIRE" DOCTRINE It is interesting to note that the concept of a compromise between creators and employers resurfaces in several official reports as part of the legislative history. 99 The comments and criticisms made by several private interest groups during the committee hearings now part of the record, 100 strongly suggest that lobbying from the various industries affected by the doctrine was in large part responsible for shaping the current law.' For example, House of Representatives Report No. 1476,102 which is considered to be the official legislative history of the 1976 Act, 0 3 states that the amendments proposed by the representatives of the screenwriters and composers were considered but rejected as unworkable. The amendments again suggested the use of the "shop right" doctrine found in patent law. 104 Between the submission of the 1965 bill and the enactment of the 1975 bill, 0 5 many similar bills and committee reports were approved but unsuccessfully sent through Congress. 0 6 It was not until Senate Bill 22 was introduced in 1975 that enough congressional support was gathered to incorporate the proposed changes into the bill, which was signed by President Ford on October 19, D. The 1976 Revision During the process of revising the 1909 copyright statute, two important changes were considered in the "works made for hire" area. The first change dealt with the scope of the employer's copyright in relation to employee-created work. The second change was a much larger and totally new concept to 99. Compare REGISTER'S SUPPLEMENTARY REPORT, supra note 95, at 66, with Legislative History, supra note 3, at See Legislative History, supra note 3, at Id. See also supra notes and accompanying text Legislative History, supra note See, e.g., Aldon Accessories Ltd. v. Spiegel, Inc., 738 F.2d 548, 552 (2d Cir.), cert. denied, 469 U.S. 982 (1984); see also Comment, Free Lance Artists, Works For Hire, and the Copyright Act of 1976, 15 U.C. DAVIS. L. REV. 703, (1982); Note, supra note 12, at See Legislative History, supra note 3, at 121. See also supra notes and accompanying text S. 22, 94th Cong., 2d Sess. (1976); see also Angel & Tannenbaum, supra note 12, at See Legislative History, supra note 3, at 48-50; see generally KAMINSTEIN, supra note 12, at S. 22, 94th Cong., 2d Sess. (1976).

17 HASTINGS COMM/ENT L. J. [Vol. 10:591 statutory protection: recognizing the rights of the independent contractor as a new category of creator. In the early revision discussions of the 1909 Act, a modification to the basic "works made for hire" theory was proposed. It suggested that the employee/author retain some rights in his creation in contexts outside the scope of his employer's business Representatives of various authors' lobbying groups urged that the employer be given the exclusive right to use the employee-created work only in direct relation to his legitimate business interests, with the employee retaining the rights in all non-competitive areas This proposal was based on the analogous patent law theory of "shop right," which allows an employee to retain rights in his inventions under similar conditions." 0 The idea of limiting the employer's ownership by splitting the copyright was not new to the post-1909 Act's revisions. A memorandum draft bill of March 2, 19061" had suggested an even narrower definition than the one based on non-competition. It proposed that "works made for hire" should be limited to "works produced by an employee during the hours for which his salary is paid."" ' 2 This suggestion, however, did not find its way into the 1909 Act. The suggestion to limit the employer's rights based on the "shop right" analogy was not accepted during the revision discussions," 3 but in a somewhat altered form, limitations were eventually incorporated into what became the 1976 Act." 4 The Act confines "made for hire" status to those works "prepared by an employee within the scope of his or her employment.""' This means that, absent a written agreement to the contrary, any works which are produced as part of an employee's regular 108. See 1963 Discussion, supra note 85 (statements in opposition to the suggestions put forth in the Register's Supplementary Report); see also KAMINSTEIN, supra note 12, at See Hearings, supra note Id. See supra notes and accompanying text STUDY No. 13, supra note 12, at 128 n Id See Legislative History, supra note 3, at 121. Although the limitation of the employer's rights was officially suggested as early as 1958 (in STUDY No. 13) it was not incorporated into any of the later, revised bills. The final version of the revision did attempt to limit the employer's rights, but it made no analogy to patent law. See S. 22, 94th Cong., 2d Sess., 101 (1976); 17 U.S.C. 101 (1982 & Supp. III 1985) See 17 U.S.C Id. (emphasis added).

18 1988] "WORKS MADE FOR HIRE" DOCTRINE duties belong to his employer." 6 However, absent a clear test to determine when a work is "within the scope of employment," this rule still results in great uncertainty because the parties to an employment relationship rarely put into writing beforehand the exact nature of the employment, or the nature of works which are to be regarded as emanating from the employment." 7 As one court has pointed out, "no one sells or mortgages all the products of his brain to his employer by the mere fact of employment."1 8 The more significant issue in revising the "works made for hire" doctrine for the 1976 Act involved the status of the independent contractor. The main problem in this area was determining when an independent contractor's work should be classified as "made for hire."" ' 9 The legislative history of the 1976 Act seems to indicate that Congress was intent on protecting the rights of independent contractors. 2 It reads: The status of works prepared on special order or commission was a major issue in the development of the definition of "works made for hire" in section 101, which has undergone extensive revision during the legislative process. The basic problem is how to draw a statutory line between those works written on special order or commission that should be considered as "works made for hire," and those that should not. The definition now provided by the bill represents a compromise which, in effect, spells out those special categories of commissioned works that can be considered "works made for hire" under certain circumstances. 12 ' Unlike the 1909 Act, the 1976 revision attempted to define a "work made for hire;' 1 22 in doing so, it considered separately works made by "employees" and those "specially commissioned" from independent contractors. 23 The 1976 Act specifically enumerates nine categories under which commissioned 116. See 1 M. NIMMER, supra note 12, 5.03[B][1][b], at 5-14 to Id. See also Angel & Tannenbaum, supra note 12, at Public Affairs Assoc. v. Rickover, 177 F. Supp. 601, 604 (D.D.C. 1959), rev'd on other grounds, 284 F.2d 262 (D.C.. Cir. 1960), vacated for insufficient record, 369 U.S. 111 (1962) Id. See Legislative History, supra note 3, at See Legislative History, supra note 3, at Id. (emphasis added) U.S.C. 101; cf Act 26. See supra note 53 and accompanying text U.S.C. 101; see generally Legislative History, supra note 3, at 121.

19 HASTINGS COMM/ENT L. J. [Vol. 10:591 works are to be considered "for hire." '24 These include "(1) contributions to a collective work,e (2) parts of a motion picture E1261 or other audiovisual work, E127 1 (3) translations, (4) supplementary works, 2 s1 (5) compilations, 129 ' (6) instructional texts, E131 (7) tests, (8) answer materials for a test, and (9) atlases.' ' 1 The 1976 Act goes even further in limiting the commissioned works which can be considered "for hire" by stating that even if a commissioned work falls within one of these categories, it still will not receive a "for hire" classification unless "the parties expressly agree in a written instrument signed by them that 32 the work shall be considered a work made for hire.' Unfortunately, when compiling the single "works made for hire" definition, Congress failed to clearly differentiate the two separate problems which it had considered during the revision process. The distinction between employees and independent contractors is still uncertain and leaves room for varied interpretations In an effort to clarify and codify a complex doctrine, Congress has left the courts with an ambiguous and confusing statute. II Interpretations of the 1976 Act Early commentators on the changes to the "works made for hire" doctrine in the 1976 Act pointed out that Congress had done much to resolve the ambiguities that had confused the ownership issue of works created by independent contractors.' Even though Congress created a statutory "works made U.S.C. 101; see also supra notes and accompanying text U.S.C. 101; see supra note U.S.C. 101; see supra note U.S.C. 101; see supra note U.S.C. 101; see supra note U.S.C. 101; see supra note U.S.C. 101; see supra note U.S.C Id. See also 1 M. NIMMER, supra note 12, 5.03[B][2][b], at 5-20 to See, e.g., Easter Seal Soc'y, 815 F.2d at 323; Evans Newton, Inc. v. Chicago Sys. Software, 793 F.2d 889 (7th Cir.), cert. denied, 107 S. Ct. 434 (1986); Aldon Accessories Ltd. v. Spiegel, Inc., 738 F.2d 548 (2d Cir.), cert. denied, 469 U.S. 982 (1984); Iris Arc v. S. S. Sarna, Inc., 621 F. Supp. 916 (E.D.N.Y. 1985). See generally O'Meara, supra note See Angel & Tannenbaum, supra note 12, at 239; 1 M. NIMMER, supra note 12, 5.03[B][2][c], at 5-21 to 5-25; Note, supra note 12, at 273. See, e.g., Childers v. High